Bulgaria Food and Drink Report

Unemployment has decreased in recent years, but employment growth will be less significant in the years ahead. This will prevent faster rates of private consumption and GDP growth. ...The lev s devaluation has not negatively affected the import bill and we do not expect a drop in purchasing power. On the one side, Bulgaria imports mainly from the eurozone, which eliminates exchange rate fluctuations, and on the other side, due to low commodity prices, gas and oil import costs from Russia have plummeted. Private consumption will remain the largest component of GDP and contributor to economic growth. With consumer confidence reaching its highest point since ----, we forecast that private consumption will grow in ---- and ----. Although private consumption s share of economic output fell to --.- of GDP in ----, we forecast that it will recover in the years ahead.

...We forecast household spending to return to positive territory in ----, though this is off a low base following years of weakness. As such, value will remain a critical theme across the sector. ...As such, value will remain a critical theme across the sector. Discount food retail stores should continue to fare well in this value-oriented environment, which bodes well for the entrance of Kam Market into the mass grocery retail sector during this year. Wine and spirits will post declines in consumption and sales in ----, as consumers turn to beer and tastes become more Westernised. ...Wine and spirits will post declines in consumption and sales in ----, as consumers turn to beer and tastes become more Westernised. A proposed tax on junk food and sugary drinks does not look set to be passed in ----, though may be something to watch for over the next five years.

...BMI View: An uptick in household spending growth will present growth opportunities for the food and drink industry over ----. Per capita spending on food and non-alcoholic drinks will exceed headline growth, indicating consumer willingness to increase expenditure in the sector. ...